Finding social value in Manchester through public procurement
Posted on 27 Apr 2022 Categories: Blog, New economic models, Community Wealth Building
In its recently published Levelling Up White Paper, the government argued that the power of public procurement should be used to deliver support to communities and pledged to put social value at the heart of government spending. The forthcoming Procurement Bill will, the government argue, provide the means to realise this ambition. In this, there is much that can be learned from the work around public procurement of Manchester City Council.
“They return the love around here, don’t they?” – Guy Garvey
Over the last 14 years, we have worked closely with the Council to understand the power and potential of procurement to deliver social value to the city’s residents. This has provided an annual stocktake of the wider community and economic benefits which have been secured through the Council’s procurement process, identified via a basket of indicators that have developed year on year.
“it requires the dedication of many over a number of years.”
The most recent analysis of the city’s top 300 suppliers (which accounts for a majority of the city’s total expenditure) shows that nearly 60% is being spent with Manchester based suppliers. This is a rise of 8% since CLES began recording the data, reflecting the fact that success in this work is not, in its nature, something that happens overnight, but that it requires the dedication of many over a number of years. In addition, the way in which the city is purchasing goods and services is helping to support a significant number of additional community benefits, including apprenticeships, volunteering and job creation for Mancunians.
The pandemic has demonstrated how, in a time of crisis, the ability of the public sector to intervene decisively and at speed is vital to help support communities and protect livelihoods. Commercial teams in councils across the country had to act quickly to procure the goods and services, whether that was PPE to protect frontline NHS workers or emergency food parcels to support vulnerable residents. But the pandemic has also shown how mismanaged regulatory regimes for public procurement can lead to billions of pounds of taxpayers money being extracted by middlemen disconnected to the places they are providing goods and services to. As we begin to recover from Covid-19, the importance of public procurement has rarely been so prominent in the public domain, and it can now play a significant role in the economic recovery.
“public procurement forms an important strand of the community wealth building we will need for recovery”
Across all parts of the UK, the health and economic impacts of Covid-19 have hit some residents and neighbourhoods more than others, including residents over the age of 50, young people, disabled residents, black, Asian and minority ethnic and low-income communities, exacerbating existing inequalities. Harnessing the power of public procurement forms an important strand of the community wealth building we will need for recovery, and provides a powerful example of how anchor institutions can use their economic power to unlock wealth in their local areas, particularly to help benefit those who are most in need of support.
Manchester City Council has been a trailblazer in advancing the public procurement aspects of community wealth building, and their work continues to inspire cities and governments both in the UK and beyond who are seeing the Covid-19 pandemic as a wakeup call for change. It is now time to reimagine and rethink our economies in a way which reconnects people with place and helps rebuild wealth to give people a real stake in their economic future.
“procurement on its own will not deliver social value outcomes”
As the pandemic enters its endgame, tough times lie ahead for both local residents and businesses. If the government are serious about levelling up, then there is much to learn from what has been done in Manchester, even within the parameters of EU legislation. The Procurement Bill will set the standard for social value for years to come, but procurement on its own will not deliver social value outcomes. To achieve lasting change, social value must become an ethos that drives inclusion across government, including the Treasury.
In the meantime, Manchester won’t be waiting for the Government’s Procurement Bill. Instead, they’ll be building on this latest analysis: getting on with the job of harnessing their economic power to deliver the social value agenda across services and operations for the good of residents, businesses and communities.
This article was originally published on the CLES blog on 18th February 2022.
Posted on 27 Apr 2022 Categories: Blog, New economic models, Community Wealth Building